Thomas J. Pyle is the president of the Institute for Energy Research.
With the economy shrinking last quarter by 0.1 percent and unemployment remaining at a pitiful 7.9 percent, President Obama and policymakers in Washington must begin looking at serious solutions to improve the economy. A recent study by Dr. Joseph Mason of Louisiana State University and the University of Pennsylvania's Wharton school provides a simple solution: allow more oil and natural gas production.
We have already witnessed the impact that energy has on economic growth in places like North Dakota, where the recent energy renaissance has lowered the unemployment rate of 3.2 percent, or in Texas, which enjoyed an $8.8 billion surplus this past year. If this administration allows production on federal lands and waters, such as has happened in North Dakota and Texas, we could see similar economic prosperity around the country.
One of President Obama's favorite solutions for improving our economy is to eliminate tax deductions oil and gas companies, which the administration claims could generate $4 billion in revenue. That sounds like a lot, but it is chump change compared to the increase in government revenue that would occur alongside increased oil production.
Dr. Mason estimates that opening federal land would generate nearly $3 trillion in additional federal, state, and local taxes over the next 37 years. Progrowth energy policies would also help speed up economic growth, which has been limping along at a very slow rate, highlighted by the recent decline in our GDP. Development on federal lands and waters could increase our GDP $127 billion annually for the next seven years, $450 billion annually in the next 30 years, for a total increase of $14.4 trillion over that 37 year span.
While these numbers alone are staggering, they do not tell the whole story. The unemployment rate has remained high for four years and many Americans are anxious to get back to work. The number of jobs that would be created from opening up energy development on federal lands and waters is enormous. The estimates show that these policies would create 552,000 jobs annually over the next seven years and nearly 2 million jobs a year in the long run.
If the president is serious about generating more revenue and creating jobs then he should embrace the decision to open up federal lands for energy development. Energy is a key driver for economic growth as we have seen in places like North Dakota and Texas. With progrowth federal energy policies we can spread this wealth and economic development around the country.